INDUSTRIAL ECONOMICS

This course provides an introductory analysis of imperfectly competitive markets through formal models of firms’ strategies and of the way the latter interact to determine market results.
Within the curricular activities of the degree in Economia e Commercio, this second year course completes what students learnt in the first year course in Microeconomics, by extending the study of the way markets function to the case of imperfect competition.

1. Knowledge and understanding:
At the end of the course the student should know the most important models of oligopolistic markets both, both from a static and a dynamic point of view and to evaluate their implications in terms of social welfare.

2. Ability to apply knowledge and understanding:
At the end of the course the student should be able to identify and explain which factors determine firms’ market power in oligopolistic markets and to predict how the functioning of these markets is influenced by policy issues and by firms’ strategies.

3. Ability to make judgments:
At the end of the course the student should be able to apply the to use the knowledge gained during the course to:
a) model simple economic situations, apply mathematical techniques to solve them, and interpret the answers intuitively,
b) discuss case-studies taken from the news,
c) critically compare different models of oligopoly and discuss the relevance of their results.

Microeconomics http://www.unive.it/pag/203/

- Price discrimination and bundling
- Quantity competition and the Cournot model
- Price competition and the Bertrand model. Capacity constraints
- A basic introduction to repeated games. Collusion
- Product differentiation and the Hotelling model
- Strategic entry deterrence
- Vertical relations
- Networks goods and standards
A detailed syllabus in available on the course website on Moodle.

L. Cabral, Introduction to industrial organization, second edition, The MIT Press, 2017.
Notes provided by the teacher are available on Moodle.

Seventy-five minutes written examination with open questions, exercises and case-studies. A sample exam is available on Moodle. The passing grade is 18; points assigned to each question are clearly indicated in the exam.
The examination tests the student’s understanding of the topics covered in class and his/her ability to analyse closely related problems and to apply results obtained with theoretical models to the interpretation of real life examples.

Teaching is based on:
a) lectures
b) individual study and assignments.
Students are urged to read the material before class, actively participate in class discussion and solve the problems available on the course website.
Practice sessions held by a tutor (if financed by the University).

Course website (Lb-Z partition): https://moodle.unive.it/course/view.php?id=710 .

written and oral